M&A volume is up in the food and agriculture sector
According to a Capstone Partners report, “February 2022 Food & Agriculture Sector Update,” merger and acquisition (M&A) volume in the food and agriculture sector surged 17% year-over-year (YOY) in 2021 with 383 deals announced or completed, which marked the highest number of transactions in over four years.
The prospect of capital gains tax increases is reported to be the driving factor in a flurry of transaction activity at the beginning of 2021 with many business owners expediting their exit timeline to capture larger take home earnings. While the capital gains tax increase did not manifest in 2021, deal activity continued to move forward as sellers capitalized on favorable valuations and an active pool of buyers. The low cost of capital and healthy strategic company balance sheets also allowed for aggressive bids in M&A sale processes.